Pre-foreclosure

[Suzanna Lam]

Hello all,

I thought I'm gonna jump in and do my first pre-foreclosure just to test the water. I have access to a database that has all the pre-foreclosure. I read all the information contained in one pre-foreclosed information and became very confused. Could anyone help me understand:

1. Even though the NOD went out to the homeowner in May 2009. The default date indicated 6/2006 was the date of default. He bought the house in 5/2005 as indicated by the transfer date. How is this possible? I thought if you're behind in your mortgage by 6 months you're gonna get a NOD by the 7th month or something like that. In this case the homeowner, it appears, stopped making payment since 2006 and he's getting a NOD in 2009?

2. The same homeowner bought his house for $587K but is default for $544K. Zillow's estimated value is $342K. These numbers seem to indicate that this property is not a prime candidate for a pre-foreclosed deal due to zero equity in the house. Is my analysis correct? My question is how would know if a property is a good candidate for pre-foreclosure deal? Should the default amount at least 50% of the FMV as estimated by Zillows or comps?

Many thanks.